2018 begins and ends with volatility as retail investors wait for clarity on economic, political concerns

OMAHA, Neb.--(BUSINESS WIRE)--January 07, 2019--

Following a rocky month for the U.S. stock market, the TD Ameritrade(1) December Investor Movement Index(R) (IMX(SM) ) continued its downward trend for the third consecutive month to 4.41, a 16 percent decline from its November reading of 5.27. The IMX is a proprietary, behavior-based index, aggregating Main Street investor positions and activity to measure what investors actually were doing and how they were positioned in the markets.

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The reading for the four-week period ending December 31, 2018, puts the IMX at its lowest since April 2016, when it also hit 4.41 in response to a period of extreme market volatility. As such, this reading ranks "Low" relative to historic ranges.

TD Ameritrade clients were net sellers of equities for the second month in a row, although they were net buyers of Treasuries, fixed income products and other lower volatility securities.

"December was a culmination of investor anxiety over future economic growth and uncertain policy out of Washington," said JJ Kinahan, chief market strategist at TD Ameritrade. "I expect the rise in volatility to continue until the market gets more clarity, particularly on trade, and we'll see what happens with the next round of earnings reports."

Throughout December, the S&P 500 was down 9.9 percent, while the Dow Jones Industrial Average was down 9.7 percent. The Nasdaq Composite also headed lower and was down 10.2 percent, entering a bear market, which is defined as a 20 percent drop from recent highs. Late in the month, the Dow surged more than 1,000 in one trading session, the largest one-day point gain ever, but it wasn't enough to overcome losses on the index for the period.

-- Apple (AAPL), as the company's stock traded lower based on demand worries
in China.
-- AT&T (T), as the stock reached a 52-week low during the period, despite
an announcement that it's the first and only company in the U.S. to offer
a 5G mobile device.
-- General Electric (GE), as the company's stock continued its decline,
breaching the $7 mark for the first time since the financial crisis.
-- Altria Group (MO), after the company made an investment in Juul, an
electronic cigarette maker, during the period.
-- Bank of America (BAC) and JP Morgan Chase (JPM), both traded lower amidst
rising fears about economic growth and future loan demand.

Throughout the month, retail investors at TD Ameritrade also sold popular names, including:

-- Facebook (FB), despite claims of making strides in fake account
identification to help prevent election fraud, the company hit a 52-week
low during the period.
-- Twitter (TWTR), after receiving analyst downgrades over concerns
regarding content on the site.
-- Alibaba Group Holdings (BABA), as the company's stock was swept up in the
broad tech sell-off during the period, trading at a 52-week low.
-- Starbucks (SBUX), as the stock trended lower after forecasting lower
same-store sales growth along with other negative news.
-- Align Technologies (ALGN), after the company continued trading at 50
percent lower over the past few months.
-- Procter & Gamble (PG), which was among the few stocks net sold to hit a
52-week high during the period, after receiving an analyst upgrade for
trading at a discount relative to its peers.

When compared to TD Ameritrade's total client base, millennials continued to find more value in pot stocks, with Aurora Cannabis (ACB) and Canopy Growth (CGC) ranking among top traded stocks for the age group. Popular stocks sold among millennials included Twitter (TWTR) and Under Armour (UA).

2018 in Review

The five most popular stocks bought by TD Ameritrade clients throughout the year were Amazon (AMZN), AT&T (T), Netflix (NFLX), General Electric (GE) and Berkshire Hathaway (BRK B).

The five most popular stocks sold throughout the year by clients were Facebook (FB), Apple (AAPL), Bank of America (BAC), Chipotle Mexican Grill (CMG) and ConocoPhillips (COP).

Volatility impacted the markets in early 2018, with the Dow Jones Industrial Average dropping 4.6 percent on Feb. 5, 2018 -- the biggest one-day decline since August, 2011 during the European debt crisis. In response, the IMX decreased for four consecutive months at the beginning of 2018. The IMX then rebounded in spring and continued rising during summer following better-than-expected earnings and increasing equity markets. Today's investor uncertainty continues to fuel an ongoing IMX decline, which has so far spanned Oct. -- Dec. 2018.

About the IMX

The IMX value is calculated based on a complex proprietary formula. Each month, TD Ameritrade pulls a sample from its client base of more than 11 million funded accounts, which includes all accounts that completed a trade in the past month. The holdings and positions of this statistically significant sample are evaluated to calculate individual scores, and the median of those scores represents the monthly IMX. For more information on the Investor Movement Index, including historical IMX data going back to January 2010; to view the full report from December 2018; or to sign up for future IMX news alerts, please visit www.tdameritrade.com/IMX. Additionally, TD Ameritrade clients can chart the IMX using the symbol $IMX in either the thinkorswim(R) or TD Ameritrade Mobile Trader platforms.

Inclusion of specific security names in this commentary does not constitute a recommendation from TD Ameritrade to buy, sell, or hold.

Past performance of a security, strategy, or index is no guarantee of future results or investment success. Historical data should not be used alone when making investment decisions. Please consult other sources of information and consider your individual financial position and goals before making an independent investment decision.

The IMX is not a tradable index. The IMX should not be used as an indicator or predictor of future client trading volume or financial performance for TD Ameritrade.

For the latest TD Ameritrade news and information, follow the company on Twitter, @TDAmeritradePR.

Source: TD Ameritrade Holding Corporation

About TD Ameritrade Holding Corporation

TD Ameritrade provides investing services and education to more than 11 million client accounts totaling approximately $1.3 trillion in assets, and custodial services to more than 6,000 registered investment advisors. We are a leader in U.S. retail trading, executing an average of approximately 800,000 trades per day for our clients, more than a quarter of which come from mobile devices. We have a proud history of innovation, dating back to our start in 1975, and today our team of nearly 10,000-strong is committed to carrying it forward. Together, we are leveraging the latest in cutting edge technologies and one-on-one client care to transform lives, and investing, for the better. Learn more by visiting TD Ameritrade's newsroom at www.amtd.com, or read our stories at Fresh Accounts.

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